Landowners ask FERC to hold up Midship start, cite 'grievous damages'

Washington — Landowners are contending the US Federal Energy Regulatory Commission should not let Cheniere Energy's Midship Pipeline enter service, as the project has failed to restore their properties to pre-construction conditions and landowners should be compensated for "grievous damages."

The 199-mile, 1.4 Bcf/d pipeline in Oklahoma is designed to move gas to the US Gulf Coast and Southeast markets from Oklahoma's Anadarko Basin.

Midship last week asked FERC to authorize service not later than April 17 to meet needs of the project shippers. About 925 MMcf/d of the capacity has been contracted to firm service.

PRODUCTION DECLINES

As the project readies to enter service, S&P Global Platts Analytics forecasts production in the prolific SCOOP and STACK plays will fall to 3.6 Bcf/d from previous forecasts of 4.3 Bcf/d, amid global crude oil price declines.

Coupled with already underutilized capacity out of the region, this suggests the pipeline would not likely not fill with new production were it to begin service in April, according to Platts Analytics. The pipeline would add capacity for feedgas supplies to Cheniere's Gulf Coast LNG terminals, as well as offer another outlet for the SCOOP and STACK plays.

Last summer, Midship's construction faced heavy rains and other complications, delaying its interim startup plans and inflating construction costs. Among other things, heavy rains along portions of the pipeline's route caused problems related to erosion control, topsoil loss, dewatering and stabilization.

Midship, in a March 31 letter, told FERC that construction was now complete, total restoration across the project was 93% finished, and remaining restoration was "proceeding satisfactorily."

LANDOWNER IMPACTS

But Washington-based attorney Carolyn Elefant wrote FERC late last week on behalf of a number of landowners along the route, arguing that "the facts prove otherwise" in terms of remaining conditions on properties. She attached photos she said showed open trenches, ponding, flooding, and construction equipment left on the easement.

"If landowners cannot resume 'business as usual' on their properties, why should Midship be allowed to commence service?" the letter said, noting some landowners have been unable to resume farming.

The letter covers 18 individual or business-entity landowners along 56,273 feet of pipeline and 134.92 acres of right-of-way, Elefant said Monday in an email. Her letter asserted damages such as crop loss, cattle loss, irrigation system damage, flooding, topsoil loss and release of millions of gallons of privately owned water.

Cheniere did not immediately reply to a request for comment.

Elefant also argued the in-service request should not be granted because FERC has yet to act on a request for rehearing filed in August of its decision to bar landowners from using FERC's complaint procedures regarding Midship's noncompliance with FERC construction rules. FERC's most recently released environmental monitoring report listed a cumulative 206 noncompliance reports during the course of construction.

"To allow Midship to proceed while landowners' complaints are left in limbo violates the same considerations of due process and equity that prompted the US Court of Appeals for the District of Columbia Circuit to grant rehearing en banc in Allegheny Defense Project v. FERC, Docket No 17-1098," Elefant added.

That case touches on due process implications of FERC's record of issuing tolling orders, effectively putting off decisions on the merits of rehearing requests, in pipeline certificate order cases.